To proceed forward to the topic of parallel Salam, it is necessary to provide a short sketch of Salam, so that the concept of parallel Salam easily comes to our minds, and easily understand. In salam we have learned that it is used mainly in the agricultur sector to provide some financial help to the farmers. In salam we have also learned that in it the seller undertakes to supply specific goods to the buyer at future date in exchange of an advanced price fully paid at spot. The price is in cash but it shoud be noted here that the supply of purchased goods in deffered.
Now let us moving to our topic which is Parallel Salam. In the arrangement of parallel Salam there must be two different and independent contracts; in one where the bank is a buyer and the other in which it is a seller. It means that in case of Salam there must be two contract. The two contracts can not be tied up and performance of one should not be contingent on the other. This case will be more understandable if I present here an example. For example, if "A" has purchased from "B" 1000 bags of wheat by way of Salam to be delivered on 31st December, "A" can contract a parallel Salam with "C" to deliver to him 1,000 bags of wheat on 31th December. But while contracting parallel Salam with "C " the delivery of wheat to "C" can not be conditioned with taking delivery from "B". Therefore, even if "B" did not deliver wheat on 31st December, A is ready to bound to deliver 1000 bags of wheat to "C". He can seek whatever recourse he has against "B", but he can not rid himself from his liability to deliver wheat to "C". Similarly, if "B" has delivered defective goods, which do not confirm to the agreed specifications, "A" is still obligated to deliver the goods to "C" according to the specifications agreed with him.
In this example we learned that in case of Salam there must be two different and independent contracts. In these two different and independent contracts one party will act as buyer as well as the seller. In example given above, it is clear that one party has contracted and purchased one thousand bags of wheat by using the Salam contract, and the contract consist of the condition that he, "B", is bound and will deliver these one thousand bags of wheat to "A" on 31th December. In the same way "A", which is the seller, in the first contract, can make an other contract with "C", in the form of paraller Salam, to deliver 1,000 bags of wheat on 31st December. In this case it is to be noted that in the first contract between "A" and "B", "A" has acted as buyer or purchaser and in the second contract "A" has acted as seller becouse "A" has contracted to delever 1,000 bags of wheat to "C".
But keep in mind and should be cristal clear that the later contract, which is parallel Salam, can not be conditioned that when "A" take the delivery of 1,000 bags of wheat then after this delivery "A" will deliver the 1,000 bags of wheat to "C". Therefore, if "B" failes to provide the 1,000 bags of wheat to "A" on 31 December, "A" is bound to deliver and provide the 1,000 bags of wheat to "C" on 31 December. In this case "A" is responsible to provide the 1,000 bags of wheat to "C", and he is bound, according to the contract, to make the possible arrangement for this delivery, even if "B" failes to deliver the 1,000 bags on the exact date and time. In this case "A" can seek and provide, whatever, punishments to "B" for its late delivery of 1,000 bags of wheat or totally failur, but "A" can not say that i am not responssible for late or complete failur of delivery of these specified bags of wheat on the specified date and time. In the same way "A" can not rid himself from his liability to provide wheat to "C" on the specified date and time.
In this example i also tried to make it understandable for the reader that, in case, if "B" has provided defective goods to "A", therefore, "A" is still responsible and it is the obligation of "A" to provide the goods to "C" according to the agreed agreement with him.
Now let us moving to our topic which is Parallel Salam. In the arrangement of parallel Salam there must be two different and independent contracts; in one where the bank is a buyer and the other in which it is a seller. It means that in case of Salam there must be two contract. The two contracts can not be tied up and performance of one should not be contingent on the other. This case will be more understandable if I present here an example. For example, if "A" has purchased from "B" 1000 bags of wheat by way of Salam to be delivered on 31st December, "A" can contract a parallel Salam with "C" to deliver to him 1,000 bags of wheat on 31th December. But while contracting parallel Salam with "C " the delivery of wheat to "C" can not be conditioned with taking delivery from "B". Therefore, even if "B" did not deliver wheat on 31st December, A is ready to bound to deliver 1000 bags of wheat to "C". He can seek whatever recourse he has against "B", but he can not rid himself from his liability to deliver wheat to "C". Similarly, if "B" has delivered defective goods, which do not confirm to the agreed specifications, "A" is still obligated to deliver the goods to "C" according to the specifications agreed with him.
In this example we learned that in case of Salam there must be two different and independent contracts. In these two different and independent contracts one party will act as buyer as well as the seller. In example given above, it is clear that one party has contracted and purchased one thousand bags of wheat by using the Salam contract, and the contract consist of the condition that he, "B", is bound and will deliver these one thousand bags of wheat to "A" on 31th December. In the same way "A", which is the seller, in the first contract, can make an other contract with "C", in the form of paraller Salam, to deliver 1,000 bags of wheat on 31st December. In this case it is to be noted that in the first contract between "A" and "B", "A" has acted as buyer or purchaser and in the second contract "A" has acted as seller becouse "A" has contracted to delever 1,000 bags of wheat to "C".
But keep in mind and should be cristal clear that the later contract, which is parallel Salam, can not be conditioned that when "A" take the delivery of 1,000 bags of wheat then after this delivery "A" will deliver the 1,000 bags of wheat to "C". Therefore, if "B" failes to provide the 1,000 bags of wheat to "A" on 31 December, "A" is bound to deliver and provide the 1,000 bags of wheat to "C" on 31 December. In this case "A" is responsible to provide the 1,000 bags of wheat to "C", and he is bound, according to the contract, to make the possible arrangement for this delivery, even if "B" failes to deliver the 1,000 bags on the exact date and time. In this case "A" can seek and provide, whatever, punishments to "B" for its late delivery of 1,000 bags of wheat or totally failur, but "A" can not say that i am not responssible for late or complete failur of delivery of these specified bags of wheat on the specified date and time. In the same way "A" can not rid himself from his liability to provide wheat to "C" on the specified date and time.
In this example i also tried to make it understandable for the reader that, in case, if "B" has provided defective goods to "A", therefore, "A" is still responsible and it is the obligation of "A" to provide the goods to "C" according to the agreed agreement with him.
In this case in the primery salam contract the seller is "B" Suppose he is a farmer so how he can make a parallel slam with any other party for any thing.
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